Can we produce our product at scale?
Expanding into wholesale means producing your product at an increased rate. If you can't keep up with demand or maintain quality control while scaling up, it might be better to stick to direct-to-consumer sales. For us, the original pizza steel was a simple product that didn't require much in terms of assembly or manufacturing complexity. We were able to scale production without sacrificing quality, so we went ahead with wholesale.
Will our margins hold up?
Wholesale typically involves selling your products at a lower price per unit than direct-to-consumer sales. You need to ensure that your profit margin remains healthy after factoring in the cost of producing and shipping more units. We found that by increasing our volume, we could negotiate better deals with suppliers and manufacturers, which helped offset some of the reduced margins on individual sales.
Can we handle increased logistics?
Moving from direct-to-consumer sales to wholesale means dealing with more complex logistics—managing inventory, shipping products to multiple locations, and coordinating with retail partners. If you don't have the resources or infrastructure to handle these tasks efficiently, it might be better to stick with what you know best. We were fortunate enough to have a capable team that could manage the additional workload associated with wholesale distribution.
Can we maintain our brand identity?
Expanding into wholesale can sometimes lead to dilution of your brand identity if retailers don't display or promote your products as you would like them to. If maintaining control over how your product is presented and sold is crucial to your business, then wholesale might not be the best move for you. We ensured that our retail partners understood and valued our brand identity, which helped preserve its integrity throughout the wholesale process.
Does our target market align with potential retail partners?
Before entering into a partnership with a retailer, it's essential to ensure that your target markets align. If you're selling high-end luxury goods and your potential retail partner primarily sells budget products, your products may not fit well within their existing product lineup or resonate with their customer base. We carefully selected retail partners whose customer bases matched our target market, ensuring a successful partnership for both parties.
In conclusion, expanding into wholesale can be an exciting opportunity for small businesses looking to grow their customer base and increase revenue. However, it's not a decision to be taken lightly—it requires careful consideration of factors such as production capabilities, profit margins, logistics, brand identity, and target market alignment.
